Daily News

August 13, 2012

Federal Issues


Office of the Comptroller of the Currency Officials Convene Meeting with the California Bankers Association

Last week, six senior officials from the OCC were in San Francisco to conduct their fourth of five regional outreach meetings they are hosting around the country.Rod Brown, president & CEO of the California Bankers Association, was joined by executives from the Oregon Bankers Association, Washington Bankers Association, Community Bankers of Washington, the California Independent Bankers and the American Bankers Association. Officials from the OCC included Jennifer Kelly, senior deputy comptroller for midsize and community bank supervision, Kay Kowitt, deputy comptroller for the western district, Greg Golembe, director for banking relations and Larry Hattix, ombudsman. The substantive meeting that spanned six hours covered a number of important industry topics, and Brown had an opportunity to engage the OCC representatives in a dialogue about a number of issues California bankers have expressed recent concern about including troubling exam experiences and the integration of the Office of Thrift Supervision into the OCC. The banking regulatory community at both the state and federal levels has made these types of outreach meetings a priority for their respective agencies, and the CBA looks forward to future opportunities to continue the dialogue on issues of key importance to California bankers.

CFPB Director Richard Cordray and CBA President & CEO Rod Brown Discuss Banker Concerns

Last week CBA President & CEO Rod Brown spoke with CFPB Director Cordray on a number of important banking issues currently before the CFPB. The 30-minute call initiated by Director Cordray covered a variety of topics including concerns over foreign remittances and the issue of qualified mortgages. Brown suggested to the director that a bank originating and holding in portfolio residential mortgage loans that do not fully meet the eventual qualified mortgage underwriting criteria should be given safe harbor. With regards to the issue of TILA and RESPA merging, Brown emphasized the importance of simplicity, but also stressed that industry will need time to phase in the changes. Finally, Brown broached the concerning subject of enforcement lawyers participating in examination entry meetings, to which the director indicated was being done in an effort to cross-train staff. Brown proposed that the CFPB could explain this in the entry letter and also add further explanation regarding this practice on the CFPB’s website. Overall, the director was very attuned to the issues impacting California bankers, and expressed a willingness to keep open the lines of communication for future conversation on CFPB-related issues.


Federal Court Finds Bank Liable for Violating ATM Fee Notice Standard

A federal district court in Minnesota ruled that a bank’s ATM fee notice did not satisfy the Electronic Funds Transfer Act provision that requires the notice to be posted in a “prominent and conspicuous location” on the machine. Although neither the EFTA nor Regulation E, which implements it, defines the term, the court ruled that the bank’s notice was non-conforming as a matter of law because it did not stand out compared to other signs and notices on the ATMs. Some of the other signs are in color or back lit. See CBA’s Regulatory Compliance Bulletin for greater detail.



Three California Bankers to Serve on the ABA Community Bankers Council

Two California bankers, William Martin, chairman, president & CEO of Bank of Sacramento and Scott Kavanaugh, chairman & CEO of First Foundation Bank, recently accepted invitations from the ABA to serve on the association’s Community Bankers Council. Scott Racusin, president & CEO of Wedbush Bank, was also recently reappointed to serve a second, one-year term on the council. All nominated by the CBA, as members of the council, the bankers will participate in two annual meetings to comment and strategize on government relations issues, banking trends and competitive priorities. Council members pinpoint critical community bank challenges and initiate proactive strategies to respond to identified needs. They are also frequently called upon to promote the positive aspects of community banking by offering testimony on Capitol Hill, appearing in media interviews and serving as sources for the industry’s responses to government regulations and rules. Additionally, members knowledgably represent community bankers on internal ABA committees including the government relations council. CBA congratulates these three bankers on their selection to serve on this prominent council.


California Issues



New California Law Clarifies Ownership of Multiple Party Accounts

The California legislature enacted AB 1624, which the governor is expected to sign, and seeks to restore what it believes to be the original intent of a provision in the California Multiple Party Accounts Law codified beginning at Probate Code Section 5100. Section 5301 provides that an account belongs to parties “in proportion to the net contributions by each to the sums on deposit.” A court has interpreted this provision to mean that any party to a multi-party account has unlimited rights to withdraw funds without accounting to the other accountholders regardless of their relative contributions. AB 1624 is revised to state that accountholders retain a right to any “excess withdrawal” in accordance with their net contributions. The law does not require banks to inquire as to the source of funds, how the funds would be applied for purposes of establishing net contributions, or limit withdrawals or any other use of an account based on the net contribution of any party, whether or not it has actual knowledge of each party’s contribution. See CBA’s Regulatory Compliance Bulletin for addtional detail.


Membership Issues


California Mortgage Foreclosure Reform – “Homeowner Bill of Rights” – Web Seminar

This webinar covers what you need to know about the newly enacted California Attorney General’s “Homeowner Bill of Rights.” Much of this webinar is dedicated to the work product of a state legislative conference committee convened to specifically focus on prohibiting dual-tracking, requiring single points of contact as a means to improve borrower communication, increasing standards on loan documentation and imposing legal liability through private rights of action. The webinar will also feature a discussion about the non-controversial measures contained with the Homeowner Bill of Rights pertaining to blight deterrence and the rights of tenants who rent or lease foreclosed properties.
Please join us on Wednesday, September 5, 2012 at 11:30 a.m. (PDT) to hear the latest on this legislation from:

• Neil Rubenstein, shareholder, BuchalterNemer, a Professional Corporation
• William Stern, partner, Morrison & Foerster LLP
• Nancy Thomas, partner, Morrison & Foerster LLP
• Peter Munoz, partner, Reed Smith LLP

Senior executives/managers, chief credit officers, chief risk officers, residential loan officers, compliance, audit, bank counsel, special assets, loan workout specialists and credit administration personnel will benefit from this webinar. For more information/registration, please visit the CBA website or contact John Lingvall at 916/438-4428, jlingvall@calbankers.com.

2012 Directors Certification Update

Passive internal oversight by boards of directors across the financial sector has been called one of the chief factors in the current financial crisis. Boards of directors are given the responsibility for overseeing management decisions and protecting the value of the firm for shareholders. And coming to grips with the Dodd-Frank Act is a tall order, no matter how you cut it.

Now in its 10th year, the Directors Certification Update is your opportunity to keep your Directors Certification current. While this full-day update is designed for directors that hold their certification, all directors will benefit from the critical information offered in this program. This year’s session will spend a good deal of time on the new regulatory reform legislation and what it means for directors. The program will be led by Mark Aldrich, principal of Aldrich, Bonnefin & Moore, P.L.C. assisted by experienced bank directors.

New directors, including directors new to banking, and experienced directors looking for a
refresher should attend. The Directors Certification Update will be offered at two locations:
Hyatt Regency Century Plaza - Tuesday, October 9, 2012
Westin St. Francis - Thursday, October 11, 2012

For more information/registration please visit the CBA website or contact John Lingvall at 916/438-4428, jlingvall@calbankers.com.

34th Annual Regulatory Compliance Conference: October 2-5, 2012 at Hyatt Regency Mission Bay in San Diego, CA

The California Bankers Association’s 34th Annual Regulatory Compliance Conference is right around the corner and if you haven’t registered you are missing out on savings of up to $300 on your registration fees. Register before September 4 and save $200 on your registration fees and register three or more people from your institution and receive an additional $100 off each registration.* The CBA room rate expires on September 11. Hotel accommodations can be made by calling the Hyatt Regency Mission Bay Spa and Marina at 619/224-1234. The CBA special room rate is $189, single or double occupancy, plus tax. Please make your reservations before September 11. Requests after this date will be accepted on a space-available basis at standard price.

For registration and program information please visit our event page at www.calbankers.com/regcomp12.
*Group registrations must be faxed together to receive the group discount

2012 Chief Credit Officers Symposium: November 1-2, 2012 at The Clement in Monterey, CA

Registration and the preliminary agenda for this event are now available online, but act fast, early-bird pricing ends October 5. Designed for commercial credit managers, this conference focuses on issues of high importance on a local and regional basis. Topics of interest include stress testing and concentration guidelines, legislative updates, future implications of Dodd-Frank, economic forecasts, TDR workouts and case studies. This event is also an opportunity for peers to network and educate one another on the challenges and successes they have observed at their respective institutions during the past year. For registration and program information please visit our event page at www.calbankers.com/cco12.



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